New rules regarding e-commerce in Brazil

New rules regarding e-commerce in Brazil

However, when it comes to companies operating entirely on-line and whose main purpose is the commercialization of intangible digital products and services, this rule seems very questionable.

On May 14 2013 came into effect the new Brazilian E-commerce Act, enacted through the Federal Decree No. 7,962 of March 15 2013. The new Act brings new rules regarding the need for providing information on products and services purchased on line, inter alia, the need for clear and specific information regarding products and services offered and for providers to improve online customer support and rules concerning cooling-off period ("Right of Regret").

The Act applies to all companies using a website or any other electronic means to make an offer or conclude a consumer transaction. This type of regulation is no news to other countries. Since 2000 the European Union has adopted the Electronic Commerce Directive (“Directive 2000/31/CE”) while in the U.S, despite its failure to become federal law, the proposed Uniform Computer Information Transactions Act (UCITA), has been adopted by the states of Virginia and Maryland. In all cases the purpose of the law is the same: improving access to the information of services and products offered on-line whilst assuring transparency and protection to e-consumers.

The first obligation set out by the Brazilian E-commerce Act is that companies acting in the Brazilian e-commerce market need to indicate prominently and clearly complete information regarding the products and services offered to the consumers, as well as all information concerning the provider, thereby enabling easy identification of the product and service offered to sale . The term “provider” has the same definition as provided by the Brazilian Consumer Protection Code, comprehending various actors involved in the production chain, including in the fields of production, construction, assembly, transformation, importation, exportation, distribution and commercialization. Furthermore, in accordance with the new regulation, companies making use of the internet to optimize the offer and sale of their products and services need to provide and facilitate customer´s service, from the initial steps of pre-sale until the final delivery of the product. This facilitation includes making available the contract in its full version for download as well as providing a summary version thereof having all restrictive of rights provisions highlighted.

The act also requires the provider to immediately confirm the acceptance of the transaction as well as the obligation to make use of technological safe means to enable the transmission of data and execution of payment, such as the SSL/TLS protocol for the implementation of HTTPS (Hypertext Transfer Protocol Secure). The need to clearly inform the consumers about their Right of Regret and provide suitable means for exercising this right is also contemplated by the Act. The Right of Regret under Brazilian law is provided by the Brazilian Consumer Protection Code which grants consumers the right to cancel any contract within 7 days of its conclusion or receipt of the product, when such transaction is concluded outside the establishment of the provider.

The rationale behind this rule is that consumers have less possibility of fully evaluating a product or service when they acquire such product or service outside the establishment of the provider. However, when it comes to companies which operates entirely on-line and whose main purpose is the commercialization of “intangible digital products and services”, with their website being their sole “establishment”, this rule seems very questionable. The application of the Right of Regret, therefore shall be examined on a case to case basis.

In order to meet the requirements of this new regulation it is advisable for e-commerce companies acting in the Brazilian market to undergo in-depth legal compliance comprehending analysis of the means and channels by which products and services are offered, procedures regarding confirmation and conclusion of transactions, customer services optimization and the facilitation of texercise of the Right of Regret by consumers. Failure to comply with these new rules may cause the competent authorities to impose penalties on thesecompanies such as fines or even total or partial prohibition to continue to do business. Brazil Israel qualified lawyer with extensive experience and expetrise in handling local and transnational legal matters.

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Dual qualified lawyer in Brazil and Israel with extensive experience and expertise in handling local and cross-border legal matters primarily practicing in the areas of intellectual property, corporate and business law and international arbitration.